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Tuesday, February 3, 2015

Imperfect Knowledge

Frustrations
abound whenever homeowners do not have the full picture. Despite the desire for Board transparency,
unfortunately there are times when the details must be withheld. Whether it is a lawsuit, employee reviews, or
contract negotiations - the Board of Directors finds itself balancing competing
rights and obligations. The result is
often a lot of unfair abuse dealt out by the homeowner toward management and
the Board. Here are four examples.

EXAMPLE
#1: A new client community discovered years of
massive fraudulent billing by the onsite maintenance company. The maintenance men lived in the community
and had cultivated friendly relations with all the homeowners. A quick phone call and ‘presto’, the
maintenance man was at the door. No one
could understand why suddenly it was taking several days to have simple work
completed (since a vendor was having to travel to the community), although the
work was now being done at a third of the price. To not jeopardize the ongoing investigation
and eventual lawsuit, the new community association manager stoically endured
the daily insults.

IDEAL
RESPONSE: In this particular situation,
it is best to say very little until the investigation is completed. The manager
can continue to apologize for delays and address the homeowner concerns on a
case by case basis. The community could look at providing owners with
alternative companies to complete the desired work.

EXAMPLE
#2: In another new community, the Board received a
threat of litigation, and only then discovered it did not have Directors &
Officers insurance coverage in place. It
could not go out and obtain this insurance after-the-fact and still rely on it
for the pending lawsuit. The suit
stemmed from a landscape violation citation, and the Board made the business
decision to back down on enforcement, as the community did not have the funds
to endure a court battle. Neighbors,
unaware of this background, were rightfully angry about the violation not being
pursued.

RECOMMENDED
RESPONSE: They can inform owners that the
Association is aware that this violation exists, the owner has been addressed
but as a matter of policy and privacy for individual owners the Association
does not discuss the details of individual owner violations. They could also
state that due to pending litigation this violation cannot be discussed.

EXAMPLE
#3: A Board is receiving numerous complaints from
the ownership about the management company. However, the Board has only just
begun the process of interviewing new management companies.

RECOMMENDED
RESPONSE: The Board should not begin
informing these frustrated owners that they are shopping for other management
companies. However, the Board should thank owners for their feedback and
reassure them that these matters will be addressed with the management company.

EXAMPLE #4: It is easy to see the
management company as a policing agent for all community issues. While this may
be true for violations of the CC&Rs (covenants, conditions & restrictions) such as home and lawn maintenance, there
are often complaints to the Manager that may be beyond the HOA’s realm of
authority or responsibility. In one large community of single family homes with
hundreds of children, a homeowner complained multiple times that the kids in
the neighborhood were “delinquent kids” that “do not have respect
for other people's property” because they were running through her yard. She
was surprised to hear there was little the HOA could do to prevent or deter
this behavior. She responded, “You
can tell someone they can’t cut down a tree but you can't address kids out of
control?”

RECOMMENDED RESPONSE: Constant
homeowner education is important. While no one wants to be “that neighbor,” the
HOA is limited by the CC&Rs and By-Laws on what it can enforce. When advising
homeowners on neighbor-to-neighbor disputes, the manager should offer possible
solutions for the homeowner to solve neighborly problems. If these solutions
are not acceptable, the owner may need to look elsewhere for advice.

Associations
have varying levels of transparency depending on the leadership in place. While owners are entitled to a certain amount
of information, many times it is not appropriate for non-Board members to know
the details surrounding the timeline or means of enforcing a particular issue. When bad things happen in the community or a
large expense is incurred, people want to know how this happened and what is
being done about it. It’s important for
management and the Board to focus on the action steps that will be taken and to
communicate what can be communicated without violating the law or Association
regulations.